Texas 2021 - 87th Regular

Texas House Bill HB3470 Compare Versions

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1	1	87R11028 CXP-F
2	2	By: Thierry H.B. No. 3470
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to electricity service in this state; imposing
8	8	administrative penalties.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 15.023, Utilities Code, is amended by
11	11	amending Subsections (b), (c), and (d) and adding Subsections (b-1)
12	12	and (b-2) to read as follows:
13	13	(b) Except as provided by Subsection (b-1), the [The]
14	14	penalty for a violation may be in an amount not to exceed $25,000.
15	15	Each day a violation continues or occurs is a separate violation for
16	16	purposes of imposing a penalty.
17	17	(b-1) The penalty for a violation of a reliability standard
18	18	adopted by the independent organization certified under Section
19	19	39.151 or of a commission rule relating to reliability in the
20	20	wholesale electric market may be in an amount not to exceed
21	21	$100,000. Each day a violation continues or occurs is a separate
22	22	violation for purposes of imposing a penalty.
23	23	(b-2) If a person pays a penalty to a federal authority for a
24	24	violation of a reliability standard that is the same or
25	25	substantially the same as a reliability standard adopted by the
26	26	independent organization certified under Section 39.151:
27	27	(1) the commission may not assess an administrative
28	28	penalty for the same instance or circumstance for which the person
29	29	paid the federal penalty; and
30	30	(2) the commission shall refund the full amount of an
31	31	administrative penalty that the commission assessed against the
32	32	person before the date the person paid the federal penalty, if the
33	33	commission assessed the penalty for the same instance or
34	34	circumstance for which the person paid the federal penalty.
35	35	(c) The commission by rule shall establish a classification
36	36	system for violations described by Subsection (b) and a separate
37	37	classification system for violations described by Subsection
38	38	(b-1). Each system must include [that includes] a range of
39	39	administrative penalties that may be assessed for each class of
40	40	violation, based on:
41	41	(1) the seriousness of the violation, including:
42	42	(A) the nature, circumstances, extent, and
43	43	gravity of a prohibited act; and
44	44	(B) the hazard or potential hazard created to the
45	45	health, safety, or economic welfare of the public;
46	46	(2) the economic harm to property or the environment
47	47	caused by the violation;
48	48	(3) the history of previous violations;
49	49	(4) the amount necessary to deter future violations;
50	50	(5) efforts to correct the violation; and
51	51	(6) any other matter that justice may require.
52	52	(d) The classification system established under Subsection
53	53	(c) shall provide that a penalty in an amount that exceeds $5,000
54	54	may be assessed only if the violation is included in the highest
55	55	class of violations in the classification system. This subsection
56	56	does not apply to the classification system established under
57	57	Subsection (c) for a violation described by Subsection (b-1).
58	58	SECTION 2. Section 15.104(a), Utilities Code, is amended to
59	59	read as follows:
60	60	(a) The commission on its own motion may issue a cease and
61	61	desist order:
62	62	(1) after providing notice and an opportunity for a
63	63	hearing if practicable or without notice or opportunity for a
64	64	hearing; and
65	65	(2) if the commission determines that the conduct of a
66	66	person:
67	67	(A) poses a threat to continuous and adequate
68	68	electric service;
69	69	(B) is fraudulent;
70	70	(C) is hazardous;
71	71	(D) [(C)] creates an immediate danger to the
72	72	public safety; or
73	73	(E) [(D)] is causing or can be reasonably
74	74	expected to cause an immediate injury to a customer of electric
75	75	services and that the injury is incapable of being repaired or
76	76	rectified by monetary compensation.
77	77	SECTION 3. Subchapter D, Chapter 15, Utilities Code, is
78	78	amended by adding Section 15.108 to read as follows:
79	79	Sec. 15.108. ADMINISTRATIVE PENALTY. The commission may
80	80	impose an administrative penalty under Subchapter B against a
81	81	person who violates an order issued under this subchapter.
82	82	SECTION 4. Section 31.003, Utilities Code, is amended by
83	83	adding Subsection (c) to read as follows:
84	84	(c) A report issued under this section before September 1,
85	85	2023, must include a summary of the information required by Section
86	86	39.926 to be provided on the Internet website found at
87	87	http://www.puc.state.tx.us. This subsection expires September 1,
88	88	2023.
89	89	SECTION 5. Section 39.002, Utilities Code, is amended to
90	90	read as follows:
91	91	Sec. 39.002. APPLICABILITY. This chapter, other than
92	92	Sections 39.1516, 39.155, 39.157(e), 39.203, 39.904, 39.9051,
93	93	39.9052, [and] 39.914(e), and 39.9161, does not apply to a
94	94	municipally owned utility or an electric cooperative. Sections
95	95	39.157(e), 39.203, and 39.904, however, apply only to a municipally
96	96	owned utility or an electric cooperative that is offering customer
97	97	choice. If there is a conflict between the specific provisions of
98	98	this chapter and any other provisions of this title, except for
99	99	Chapters 40 and 41, the provisions of this chapter control.
100	100	SECTION 6. Section 39.151, Utilities Code, is amended by
101	101	amending Subsections (d-1), (d-2), (d-3), and (e) and adding
102	102	Subsections (g-2) and (g-3) to read as follows:
103	103	(d-1) The commission shall require an independent
104	104	organization certified by the commission under this section to
105	105	annually submit to the commission for review and approval the
106	106	organization's entire proposed annual budget. The commission
107	107	[shall review the proposed budgets either annually or biennially
108	108	and] may approve, disapprove, or modify any item included in the [a]
109	109	proposed budget. The commission by rule shall establish the type of
110	110	information or documents needed to effectively evaluate the
111	111	proposed budget and reasonable dates for the submission of that
112	112	information or those documents. The commission shall establish a
113	113	procedure to provide public notice of and public participation in
114	114	the budget review process.
115	115	(d-2) An [Except as otherwise agreed to by the commission
116	116	and an] independent organization certified by the commission under
117	117	this section[, the organization] must submit to the commission for
118	118	review and approval proposals for obtaining debt financing or for
119	119	refinancing existing debt. The commission may approve, disapprove,
120	120	or modify a proposal.
121	121	(d-3) An independent organization certified by the
122	122	commission under this section shall develop proposed performance
123	123	measures to track the organization's operations. The independent
124	124	organization must submit the proposed performance measures to the
125	125	commission for review and approval. The commission shall annually
126	126	review the organization's performance as part of the budget review
127	127	process under Subsection (d-1). The commission shall prepare an
128	128	annual [a] report [at the time the commission approves the
129	129	organization's budget] detailing the organization's performance
130	130	and submit the report to the lieutenant governor, the speaker of the
131	131	house of representatives, and each house and senate standing
132	132	committee that has jurisdiction over electric utility issues.
133	133	(e) After approving the budget of an independent
134	134	organization under Subsection (d-1), the commission shall
135	135	authorize the organization to charge to wholesale buyers and
136	136	sellers a system administration fee, within a range determined by
137	137	the commission, that is reasonable and competitively neutral to
138	138	fund the independent organization's approved budget. The
139	139	commission shall investigate the organization's cost efficiencies,
140	140	salaries and benefits, and use of debt financing and may require the
141	141	organization to provide any information needed to effectively
142	142	evaluate the reasonableness and neutrality of the fee or to
143	143	evaluate the effectiveness or efficiency of the organization. The
144	144	commission shall work with the organization to establish the detail
145	145	of information, both current and historical, and the time frames
146	146	the commission needs to effectively evaluate the fee. The
147	147	commission shall require the independent organization to closely
148	148	match actual revenues generated by the fee [and other sources of
149	149	revenue] with revenue necessary to fund the budget and make
150	150	quarterly fee adjustments[, taking into account the effect of a fee
151	151	change on market participants and consumers,] to ensure that the
152	152	budget year does not end with surplus or insufficient funds. The
153	153	commission shall require the organization to submit to the
154	154	commission quarterly[, on a schedule determined by the commission,]
155	155	reports that compare actual expenditures with budgeted
156	156	expenditures.
157	157	(g-2) To maintain certification as an independent
158	158	organization under this section, the organization's governing body
159	159	must establish and implement a formal process for adopting new
160	160	protocols or revisions to existing protocols. The process must
161	161	require that:
162	162	(1) a majority of the organization's governing body
163	163	initiate the creation or revision of protocols; and
164	164	(2) the organization's staff develop the new or
165	165	revised protocols and submit the protocols to the governing body
166	166	for adoption.
167	167	(g-3) The governing body of an independent organization
168	168	certified by the commission under this section shall, in accordance
169	169	with formal bylaws or protocols adopted by the organization and
170	170	approved by the commission, establish and maintain an advisory
171	171	committee whose membership is broadly representative of the
172	172	organization's members to assist the organization's governing body
173	173	and staff in developing or revising protocols or in performing the
174	174	organization's other duties and functions. This subsection does
175	175	not prohibit the governing body of the organization from appointing
176	176	one or more additional committees or subcommittees to assist the
177	177	organization's governing body and staff in performing the
178	178	organization's duties and functions.
179	179	SECTION 7. Section 39.904(d), Utilities Code, is amended to
180	180	read as follows:
181	181	(d) In this section, "renewable energy technology" means
182	182	any technology that exclusively relies on an energy source that is
183	183	naturally regenerated over a short time and derived directly from
184	184	the sun, indirectly from the sun, or from moving water or other
185	185	natural movements and mechanisms of the environment. Renewable
186	186	energy technologies include those that rely on energy derived
187	187	directly from the sun, on wind, geothermal, hydroelectric, wave, or
188	188	tidal energy, [or] on biomass or biomass-based waste products, or
189	189	on gasified waste, including landfill gas. A renewable energy
190	190	technology does not rely solely on energy resources derived from
191	191	fossil fuels, waste products from fossil fuels, or waste products
192	192	from inorganic sources.
193	193	SECTION 8. The heading to Section 39.916, Utilities Code,
194	194	is amended to read as follows:
195	195	Sec. 39.916. [INTERCONNECTION OF] DISTRIBUTED RENEWABLE
196	196	GENERATION.
197	197	SECTION 9. Section 39.916(a), Utilities Code, is amended by
198	198	adding Subdivision (4) to read as follows:
199	199	(4) "Surplus electricity" means electricity generated
200	200	by distributed renewable generation that is not consumed at the
201	201	place the distributed renewable generation is installed and that
202	202	flows onto the electric distribution system.
203	203	SECTION 10. Section 39.916, Utilities Code, is amended by
204	204	adding Subsections (i), (j-1), (j-2), (j-3), (j-4), (j-5), and (l)
205	205	and amending Subsection (j) to read as follows:
206	206	(i) A distributed renewable generation owner may sell
207	207	surplus electricity to a retail electric provider or electric
208	208	utility under this section only if the owner's distributed
209	209	renewable generation is rated to produce an amount of electricity
210	210	that is less than or equal to the amount of electricity that the
211	211	retail electric customer for whom the distributed renewable
212	212	generation is installed is reasonably expected to consume annually.
213	213	(j) A [For] distributed renewable generation owner that
214	214	sells surplus electricity [owners] in an area [areas] in which
215	215	customer choice has been introduced [, the distributed renewable
216	216	generation owner] must sell the [owner's surplus] electricity
217	217	[produced] to the retail electric provider that serves the
218	218	[distributed renewable generation owner's] load of the retail
219	219	electric customer for whom the distributed renewable generation is
220	220	installed at a value agreed to by [between] the distributed
221	221	renewable generation owner and the provider. The value [that serves
222	222	the owner's load which] may include, but is not limited to, an
223	223	agreed value based on the clearing price of energy at the time of
224	224	day that the electricity is made available to the grid or the value
225	225	[it] may be a monetary credit applied to an account during a billing
226	226	period that may be carried over to subsequent billing periods until
227	227	the credit has been redeemed.
228	228	(j-1) The independent organization identified in Section
229	229	39.151 shall develop procedures so that the amount of electricity
230	230	purchased from a distributed renewable generation owner under this
231	231	section in an area in which customer choice has been introduced is
232	232	accounted for in settling the total load served by the provider that
233	233	serves the [that owner's] load of the retail electric customer for
234	234	whom the distributed renewable generation is installed [by January
235	235	1, 2009]. A distributed renewable generation owner requesting net
236	236	metering services for purposes of this section must have metering
237	237	devices capable of providing measurements consistent with the
238	238	independent organization's settlement requirements.
239	239	(j-2) A distributed renewable generation owner that sells
240	240	surplus electricity in an area in which customer choice has not been
241	241	introduced must sell the electricity to the electric utility that
242	242	serves the load of the retail electric customer for whom the
243	243	distributed renewable generation is installed. The electric
244	244	utility shall purchase the surplus electricity at a value that is
245	245	equal to the avoided cost of the electric utility, as determined in
246	246	accordance with commission rules.
247	247	(j-3) An electric utility that purchases surplus
248	248	electricity under this section shall:
249	249	(1) make a payment to the seller at least once each
250	250	quarter; or
251	251	(2) apply a monetary credit to the seller's account and
252	252	allow the credit balance to be carried forward onto the seller's
253	253	next monthly bill for not more than 12 months.
254	254	(j-4) An electric utility that purchases surplus
255	255	electricity under this section shall inform the distributed
256	256	renewable generation owner of the amount of surplus electricity
257	257	purchased from the owner in kilowatt hours during the owner's most
258	258	recent billing cycle and the price paid for the electricity.
259	259	(j-5) A distributed renewable generation owner may file a
260	260	written complaint with the commission relating to a violation of
261	261	Subsection (j-2), (j-3), or (j-4).
262	262	(l) This section does not apply to a municipally owned
263	263	utility or electric cooperative.
264	264	SECTION 11. Subchapter Z, Chapter 39, Utilities Code, is
265	265	amended by adding Section 39.9161 to read as follows:
266	266	Sec. 39.9161. DISTRIBUTED RENEWABLE GENERATION WITH
267	267	MUNICIPALLY OWNED UTILITIES OR ELECTRIC COOPERATIVES. (a) A
268	268	municipally owned utility or electric cooperative shall provide the
269	269	utility's or cooperative's customers access to interconnection of
270	270	distributed renewable generation and payment for surplus
271	271	electricity produced.
272	272	(b) The governing body of a municipally owned utility or
273	273	board of directors of an electric cooperative shall provide
274	274	oversight and adopt rates, rules, and procedures to allow
275	275	interconnection and payment for surplus electricity on or before
276	276	the 120th day after the date the governing body or board receives a
277	277	bona fide request for interconnection.
278	278	(c) A municipally owned utility or electric cooperative
279	279	that had retail sales of 500,000 megawatt hours or more in 2010
280	280	shall file the utility's or cooperative's interconnection and
281	281	surplus electricity rates, rules, and procedures with the State
282	282	Energy Conservation Office not later than January 1, 2022, and
283	283	shall make timely updates to the filed rates, rules, and
284	284	procedures.
285	285	(d) An electric cooperative shall allow interconnection if:
286	286	(1) the distributed renewable generation to be
287	287	interconnected has a five-year warranty against breakdown or undue
288	288	degradation;
289	289	(2) the rated capacity of the distributed renewable
290	290	generation does not exceed the electric cooperative service
291	291	capacity; and
292	292	(3) the distributed renewable generation meets other
293	293	technical requirements for interconnection that are consistent
294	294	with commission rules.
295	295	(e) An electric cooperative may not require a distributed
296	296	renewable generation owner whose distributed renewable generation
297	297	meets the standards established under Subsection (d) to purchase an
298	298	amount, type, or classification of liability insurance the
299	299	distributed renewable generation owner would not have in the
300	300	absence of the distributed renewable generation.
301	301	SECTION 12. Subchapter Z, Chapter 39, Utilities Code, is
302	302	amended by adding Section 39.918 to read as follows:
303	303	Sec. 39.918. INFORMATION ON INTERNET REGARDING PURCHASE OF
304	304	SURPLUS ELECTRICITY PRODUCED BY DISTRIBUTED RENEWABLE GENERATION.
305	305	On an Internet website administered by the commission, the
306	306	commission shall provide for access to easily comparable
307	307	information regarding retail electric providers' offers to
308	308	residential distributed renewable generation owners for their
309	309	surplus electricity.
310	310	SECTION 13. Section 39.916(h), Utilities Code, is repealed.
311	311	SECTION 14. The changes in law made by this Act to Section
312	312	15.023, Utilities Code, apply only to a violation that occurs on or
313	313	after the effective date of this Act. For purposes of this section,
314	314	a violation occurs before the effective date of this Act if any
315	315	element of the violation occurs before that date. A violation that
316	316	occurs before the effective date of this Act is covered by the law
317	317	in effect on the date the violation occurred, and the former law is
318	318	continued in effect for that purpose.
319	319	SECTION 15. This Act takes effect September 1, 2021.